UK Mortgage Lenders Avoiding Home Repossessions


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Council of Mortgage Lenders Issued Industry Guides in Fair Practices
The Council of Mortgage Lenders announced that its members are fully committed to helping borrowers who get into mortgage difficulties keep their homes and that repossession was a very last resort.

The CML responded to a recent report by the Treasury Committee’s in which it found that that the majority of lenders are taking pro-active steps to support consumers in mortgage difficulties.
The CML has issued comprehensive industry guidance and consumer information to help the industry and borrowers identify fair practices. These mechanisms apply to all first charge lenders, whether mainstream or not.
CML head of policy Jackie Bennett said” The industry is fully engaged to help its customers through the recession where they have a good prospect of being able to get back on track and sustain their home-ownership in the long term. Repossession remains a last resort.
We share the Committee’s view that the FSA should take action in the small minority of cases where there are any legitimate findings of poor practice.

The position on fees and charges for those in arrears (as set out by the FSA) is that they must reflect the actual work carried out without a profit element and that they should be transparent.

See related new item:Lenders making excessive charges  
 

It is important to recognise there is a cost to the lender for the additional work when managing mortgages that go into arrears and it is fair to charge for that work. Lenders need to employ staff to liaise with borrowers, to monitor the ongoing situation, and they may also incur legal costs. If lenders do not charge the borrowers who are in difficulty for these costs, they would be borne by all customers. Each firm’s cost base will differ so it is not straightforward to say a specific figure is “fair” or that higher charges are “unfair”.

© Housing Market News by The House Shop

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